Isetan Mitsukoshi : Summary of Isetan Mitsukoshi Group Financial Results Briefing for the Fiscal Year Ended March 31, 2024 Explanation Meeting

Isetan Mitsukoshi Group Financial Results

Fiscal Year Ended March 31,2024

Explanation Meeting

May 14, 2024

Isetan Mitsukoshi Holdings Ltd.

Table of Contents

1. Fiscal Year Ended March 31, 2024 (FY2023) Full-Year Results

1. Fiscal Year Ending March 31, 2025 (FY2024) Full-Year Plan

1. Progress of the Medium-term Management Plan (FY2022-FY2024) and the Plan for FY2024

IV: Basic Outline of the Next Medium-term Management Plan (FY2025-FY2030)

Table of Contents

1. Fiscal Year Ended March 31, 2024 (FY2023) Full-Year Results

1. Fiscal Year Ending March 31, 2025 (FY2024) Full-Year Plan

1. Progress of the Medium-term Management Plan (FY2022-FY2024) and the Plan for FY2024

IV: Basic Outline of the Next Medium-term Management Plan (FY2025-FY2030)

[Yoshinori Makino, Director, Managing Executive Officer, CSDO and CFO]

I would like to talk about the results for the fiscal year ended March 31, 2024 and our plans for the current fiscal year, focusing on numerical figures.

I: Fiscal Year Ended March 31, 2024 (FY2023) Full-Year Results

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1. FY2023 Full Year Results Summary

Operating income of 54.3 billion yen, exceeding the initial long-term plan (50 billion yen) of the current medium-term management plan, was achieved due to progress in the revitalization phase.

Record-high operating income and recurring income

• The significant increase in both sales and income was due to strong gross sales (112% YoY) and SG&A cost control through "scientific analysis of department stores" (103% YoY), which contributed to the steady growth.
• Store sales were strong, with both Shinjuku (375.8 billion yen) and Ginza (104.7 billion yen) achieving record highs.
  Isetan Mitsukoshi's sales totaled over 700 billion yen

I: Fiscal Year Ended March 31, 2024 (FY2023) Full-Year Results

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2. Cumulative consolidated results for FY2023

• Strong gross sales: "High sensitivity, fine quality strategy" and "CRM strategy connecting with individual customers" were successful, resulting in a significant increase in sales.
• Selling, general and administrative (SG&A) expenses remaining under control: We promoted steady cost control through "scientific analysis of department stores"
• Both operating income and recurring income reached record highs. Net income also increased substantially.

			Yearly	Difference		FY2023	Yearly
(0.1 billions of yen)	FY2023 results	Year on year	from IR in		4Q
difference		difference
			February		(Jan-Mar)
Gross sales	12,246	112.5%	+1,361	+196		3,144	+455
Net sales	5,364	110.1%	+490	+94		1,346	+144
Gross profit	3,189	111.3%	+323	+39		804	+98
SG&A	2,645	103.0%	+76	(4)		670	+14
expenses
Operating	543	183.6%	+247	+43		134	+83
income
Recurring	598	199.5%	+298	+58		149	+105
income
Net income	555	171.7%	+232	+155		244	+116

We hold great expectations about the success of increasing Gross sales and the strategies we have implemented. These strategies, "high sensitivity , fine quality," "customer identification," and "connecting with individual customers," have enabled the company to significantly increase sales.

As a result, Gross profit increased by more than 32.0 billion yen compared to the previous year. In contrast, we were able to limit the growth of Selling, general and administrative expenses to 7.6 billion, resulting in Operating income of 54.3 billion, an increase of 4.3 billion from the previous year's 24.7 billion, due in part to the strong performance since the February 2 disclosure.

Also, the table on the right shows the 4Q results. In the past, the fourth quarter was not a quarter in which profits increased that much, but this time, profits increased by 8.3 billion from the previous year to 13.4 billion, and I believe that the current profit structure is changing very much and that the fourth quarter was a quarter in which we could hold great expectations about the increase of profits.

The change from Operating income to Recurring income from the previous year was +5.5 billion to 59.8 billion, due in part to a significant contribution from equity in earnings of affiliates.

Net income for the year was 55.5 billion, 171% of the previous year's level, due in part to the recording of tax-effect income taxes adjustment.

I: Fiscal Year Ended March 31, 2024 (FY2023) Full-Year Results

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3. Accumulated results of our major department stores in Japan in FY2023 (by store and company)

• Isetan Shinjuku Main Store sales reached a record high (an average of 254.2 billion yen over the 10 years prior to COVID-19)
• Mitsukoshi Nihombashi Main Store and Ginza Store led the overall sales with sales of 150 billion yen and over 100 billion yen, respectively
• Major regional stores also achieved significant revenue growth.

(0.1 billions of yen)	Gross	Year on	Yearly		(0.1 billions of yen)	Gross	Year on	Yearly
sales	year	difference		sales	year	difference
Isetan Shinjuku	3,758	114.7%	+482		Sapporo Marui	605	110.3%	+56
Main Store		Mitsukoshi
Mitsukoshi	1,528					276
Nihombashi Main	110.4%	+144		Sendai Mitsukoshi	102.2%	+5
Store
Mitsukoshi Ginza	1,047	135.6%	+274		Nagoya Mitsukoshi	616	106.9%	+40
store
Isetan Tachikawa	322	106.5%	+19		Niigata Isetan	359	100.9%	+3
store		Mitsukoshi
Isetan Urawa	388	103.8%	+14		Iwataya Mitsukoshi	1,245	113.6%	+148
store
Total Isetan	7,047	115.3%	+936		Total of 5 major	3,103	108.9%	+254
Mitsukoshi		regional stores

This page shows Net sales of major department stores in Japan in FY2023.

Sales and profits have been very strong, especially in the three mainstay stores in the center of Tokyo , and in the major cities in the region.

I: Fiscal Year Ended March 31, 2024 (FY2023) Full-Year Results	4
	4. Increase/decrease in consolidated SG&A expenses
	・ Cost structure reform:	Reduction of 6.4 billion yen (160% of initial plan) compared to
		initial plan of -4.0 billion yen Company-widepenetration of cost

structure reforms to control each expense category

• Impact from price changes: Personnel expenses were higher, but utilities expenses were lower than planned.

				Breakdown of year-on-year increase/decrease
					Current year increase/decrease
	FY2023	YoY		Cost		Impact from	Newly
(0.1 billions of yen)		structure	Sales-linked	price	Other
results	difference		consolidated
		reform		changes
Personnel expenses	948	+18		(30)		+35	+12	+1
Advertising expenses	95	+8		(3)	+11
Lease payments	327	+6		(7)	+6		+5	+2
Business	298	+8		(7)		+9	+2	+5
consignment
expenses
Depreciation and	227	(6)					+2	(8)
amortization
Utilities expenses	93	(6)		(4)		(5)	+1
Other	654	+47		(13)	+51		+9
Total	2,645	+76		(64)	+69	+39	+32	0

Next is consolidated Selling, general and administrative expenses.

As part of cost structure reforms, we were able to reduce expenses by 6.4 billion compared to our initial plan of 4.0 billion. As a result, we were able to limit the growth of Selling, general and administrative expenses that is associated with Net sales to an extent, and were able to take in other cost increases such as the impact of rising prices, which I believe contributed significantly to the 54.3 billion yen in Operating income.

I: Fiscal Year Ended March 31, 2024 (FY2023) Full-Year Results

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5. Results by segment (full-year results)

• Department store business: In addition to Isetan Mitsukoshi's substantial increase in sales and profit, the improvement in profits at regional stores also contributed to the success.
  Operating income of 45.1 billion yen (221% of the previous year's figure) was a great achievement
• Credit & finance business: Operating income of 4.0 billion yen, exceeding the plan as of February due to SG&A cost control

・ Real estate business:	Construction and design sales were in line with plans.
				Operating		Yearly	Difference
(0.1 billions of yen)	Gross sales	Year on year	Net sales		from IR in
income		difference
					February

Department store	11,373	111.8%	4,483	451	+247	+41
business
Credit & finance
business/ Customer	354	105.6%	327	40	+2	+2
organization
management business
Real estate business	267	130.6%	267	30	(9)	+0
Other businesses*	251	149.2%	285	21	+7	(0)
Total	12,246	112.5%	5,364	543	+247	+43

• Operating income in the "other businesses" segment includes adjustment (40 million yen)

Next, I would like to present our segment performance for the fiscal year

ended March 31, 2024.

For FY2023, the department store segment, which is at the top of the list, showed a large difference from the previous year and from the upward revision to 50 billion in February, resulting in a total Operating income of 54.3 billion.

Table of Contents
I:	Fiscal Year Ended March 31, 2024 (FY2023)
	Full-Year Results
II:	Fiscal Year Ending March 31, 2025 (FY2024)
	Full-Year Plan
III: Progress of the Medium-term Management
	Plan (FY2022-FY2024) and the Plan for FY2024
IV: Basic Outline of the Next Medium-term
	Management Plan (FY2025-FY2030)

II: Fiscal Year Ending March 31, 2025 (FY2024) Full-Year Plan

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1. Summary of FY2024 full-year plan

Continue revitalization and evolution of each business and launch new initiatives to switch from the "store" business to the individual customer business.

Aim for record-high operating income of 64 billion yen and recurring income of 69 billion yen

• SG&A expenses are planned to be reduced by 6.1 billion yen through further penetration of cost structure reforms based on "scientific analysis of department stores"
• Department store business surpassed the 50 billion yen mark and came to 51.5 billion yen (+6.3 billion yen YoY)

Credit & finance and real estate businesses are also expected to see significant increases in their profits.

• Shinjuku Store (411 billion yen) plans to exceed 400 billion yen in store sales for the first time
  Ginza Store (114.0 billion yen) also aims to set a new record

Continuing on, here is our plan for FY2024, starting this April. The first

page shows the concept.

As you can see, this time Operating income is 64 billion yen and Recurring income is 69 billion yen. We plan to significantly increase the FY2023 record high.